FTSE 100 technical analysis for 20th July 2023
FTSE 100 Technical Analysis - The FTSE 100 closed up 1.8pc to 7,588.20, while the FTSE 250 midcap index has ended 3.78pc higher at 19,322.52.
The pound has fallen by its largest margin since March after inflation declined more than economists expected. Sterling has dropped 1pc toward $1.29 after hitting 15-month highs of more than $1.31 last Thursday.
It comes after official figures showed inflation in the UK fell to 7.9pc in June, which was down from 8.7pc in May and below economists’ predictions of a drop to 8.2pc. It has prompted a dramatic day on markets, with traders cutting bets on the peak for interest rates to 5.75pc from 6.25pc on Tuesday.
Asian stocks rose and sterling stumbled on Thursday as cooling UK inflation lifted risk appetite ahead of central bank meetings next week, while disappointing earnings results from Netflix and Tesla pushed U.S. futures lower.
FTSE 100 technical analysis
Good news on the inflation front that was welcomed by traders and the FTSE100 to continue the July rise. However, a little bit off too far too fast and the bulls failed to hold above the 7600 level, having managed a high of 7620. That level is now the line in the sand that they will need to break, which should then manage 7650.
If we see that today, and this is also R1 for today, then a drop off from here would fit pretty well, but the bulls will need to be quick out the blocks to try and recapture the 7600 level this morning.
Initial support is at the daily pivot at the 7551 level and if the 7600 level evades initially then we may well see an early slide down to that. That could well tie in with a bit of a slide on the S&P500, the 2h chart for which has gone bearish now with 4570 as resistance.
Below the daily pivot at 7551 then the next main area of support is the 7525 level where we have the 2h Hull MA and then the key fib at 7505 below that.
The 10d Raff has started to head up, along with the daily moving averages which might be inferring that we will get some more upside to end July. If we do push up, then 7650 as mentioned, and above that the bulls will be looking at 7726 R2 though that feels a bit of a big ask for today!
So, looking at 7620 and 7650 as the main resistance levels, 7550 for support.
Good luck today.
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